Families’ Hardships Must Be Softened

The federal government says that two parents raising two children anywhere in the U.S. need only $17,463 in annual income to lift their family out of poverty. But take a moment to calculate what this family might need to pay for rent, food, child care, health care, and transportation to work and school, and you’ll soon realize that this is nonsense.

Two-parent, two-child families with incomes twice as high as the poverty threshold are struggling to meet their basic needs, due to high costs and the fact that they don’t have incomes low enough to qualify for much of the federal assistance that poor families receive. As a result, millions of families across the country simply forego needed goods and services.

Even with an economic boom well underway, over 40 percent of families with incomes twice as high as the poverty level regularly worried about going hungry. Nearly one in five families had to miss meals for lack of food. One in four were unable to pay their rent, mortgage, or utility bills every month.

These families are just as likely as “officially” poor families to go without necessary medical care or decent housing. They are sometimes forced to live with other families to afford housing costs.

Many of these families don’t visit a familiar physician when they’re sick. Lacking access to preventative health care, one-third of them must instead rely on the emergency room.

The issue of need is far more fundamental than previously thought. Hardships are often hidden from view because they are suffered so routinely by so many families – families that are suburban as well as urban, families with two parents, families that work.

The Horatio Alger story has always been that work is the solution to poverty and the path to success. But working families experience the same kinds of hardships, such as going without food, necessary medical care, and housing, as families with a part-time worker or families with no worker at all.

This is a case of colossal market failure. If millions of hard-working families cannot come close to making ends meet, then it’s clear that wages need to be higher and that working families require assistance that their jobs can’t provide.

Congress needs to enact policies that boost pre-tax wages and after-tax incomes. Raising the minimum wage is a good start, and so is expanding the Earned Income Tax Credit, a federal subsidy for low-income families. But we must also eradicate some specific problems in the labor market, such as the gender pay gap and obstacles to union organizing.

Even after boosting wages and incomes, much more could be done to improve access to health care and child care, two basic needs that many families are unable to afford.

Health insurance is an important piece of the puzzle. Its makes it twice as likely that a family will experience other hardships, like missing meals involuntarily, getting evicted, and doubling up.

New programs have expanded health coverage to more children, but 7.1 million children in families with incomes below twice the poverty line still have no health insurance. These are powerful arguments for doing more to provide health care access for all Americans.

And as millions more parents with small children head to work, child care must be made accessible and affordable for everyone. Increased child care funds made available under the Child Care Development Block Grant reach only 10 to 15 percent of families eligible for them, and the large majority of families aren’t eligible. American families need a universal system of enriching pre-kindergarten care, modeled after Head Start.

An after-tax income of $17,463 won’t get a family of four very far in the United States these days – it’ll barely pay the rent. It’s time to re-evaluate how we measure hardships in America, and find ways to help working families move beyond them.

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Economic Policy Institute

EPI is an independent, nonprofit think tank that researches the impact of economic trends and policies on working people in the United States. EPI’s research helps policymakers, opinion leaders, advocates, journalists, and the public understand the bread-and-butter issues affecting ordinary Americans.